By Thomas Cooley and Peter Rupert
The BLS announced that payroll employment increased 245,000 in November, continuing a clawback to pre-pandemic levels. However, since June the additions have been moderating. Private employment grew by 344,000 while government employment fell by 99,000. Employment in the retail sector shed 34,700 jobs after gaining 95,100 the previous month. The rise in pandemic hospitalizations will likely cut into employment in both that sector as well as leisure and hospitality.
There is no way to sugarcoat the fact that this is a disastrous report. It bodes poorly for the economy as a whole. The fact that the pandemic is just entering a more robust and deadly phase means the larger consequences of what we see in the labor market are going to be dire. On top of that, many of the support policies that were put in place in the CARES Act are expiring this month.
Average hours remained at 34.8 for the third straight month, the highest level in a decade. Average hourly earnings rose to $29.58.
The household survey showed an employment decline of 74,000. The labor force declined 400,000 and the labor force participation rate declined from 61.7 to 61.5. The unemployment rate fell from 6.88 to 6.69.
The fact that workers are dropping out of the labor force and ceasing active job search – means that many have few or no prospects and have given up. Fully 23% of the pre-pandemic workforce have given up on finding employment. This leads to inevitable scarring of their prospects for the long run.
There are no wise and hopeful interpretations of this labor report. The situation is dire and more fiscal stimulus is needed. But, the political process that could deliver it is broken.